Companies may ditch car ownership due to new tax fees (Image: Getty)
Businesses are considering staying out of the used car market in exchange for rentals as a result of new and falling EV prices, according to experts. Companies have been “deferring replacement cycles” and filling “gaps” with rental due to the “erratic market”.
Andrew Leech, head of and founder of , stressed that many firms have had to “re-assess” their plans due to the uncertainty. New rates will impact electric and low-emission models as The updates from April 1, 2025 with EV owners set to pay a £195 standard VED rate.
Electric cars will pay road tax from April 1, 2025 (Image: Getty)
Many EVs valued at over £40,000 will also be from the Spring.
The updates alongside falling residual values for electric vehicles have been dubbed as the ‘perfect storm’ for firms.
, Andrew said: “We are in a very erratic market at the moment, with many businesses having to re-assess their fleet strategies from two viewpoints.
“Firstly, fleet managers are looking at the timing of the replacement of their fleets, especially those on outright purchase with a high percentage of EVs.
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“We are seeing such fleets deferring their replacement cycles and staying out of the used markets in the hope that residual values on EVs will improve.
“As a consequence, some are turning to short term rental to plug any gaps in the fleet, which can be very expensive.”
Previous analysis has indicated that some fleets could now be over a five-year period.
This takes into account the £10 first-year VED rate for electric vehicle owners, four lots of the £195 standard VED fee and four sets of the £425 ECS fee.
Andrew has argued that securing models under rental agreements or a subscription-based fee may help firms to re-balance the books.
He added: “An option is to flexibly introduce EVs on subscription rather than long-term leases – especially for businesses with seasonal or contractual requirement.”